Here’s how a SIMPLE IRA plan differs from a 401(k) plan.
SIMPLE IRA:
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Designed for a small business with 100 or fewer employees.
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Contribution limits are low compared to the 401(k) plan.
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Does not require any filing with the IRS.
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The cost to set up and manage SIMPLE IRA is low.
401(k) Plan
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Offered by any type of employer.
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Contribution limits are high.
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Requires filing with the IRS.
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The cost to set up and manage 401(k) is relatively high.